In a five-minute meeting, the St. John Coastal Zone Management Committee unanimously voted Wednesday to deny the transfer of a CZM permit for the Pond Bay Club to the German-based bank, WestLB AG.
"According to statute, the bank can’t demand the permit," CZM committee member Jerry Hills said after the meeting held at the Legislature.
Only the project’s developer, First American Development Group/Carib Limited Partnership, can ask for the permit to be transferred, Hills said. While First American pledged its CZM permit in its agreement with WestLB, it failed to ask the St. John CZM Committee’ permission to do so.
First American and the German-owned bank are locked in a legal wrangle that Hills called "complicated legally."
At issue is First American’s $62 million debt to the bank, which is threatening to foreclose on the property, according to a Tradewinds newspaper report following an Oct. 30 CZM meeting. The newspaper also reported that First American owes more than $5 million to a dozen local contractors.
Work on the Pond Bay Club project stopped in October, developer Bob Emmett said after the CZM meeting. He said the first phase of the project is about 65 to 70 percent complete. The first phase includes the first 26 of 50 planned units.
Emmett said at the Oct. 30 meeting that WestLB is in financial trouble and if it gets the CZM permit, the bank will sell it to the highest bidder.
He said after Wednesday’s meeting that once the situation with WestLB is sorted out, First American will be able to find additional financing to finish the project.
"We’ll have heads in beds by the end of summer," he said.
In addition to Hills, CZM Chairman Madaline Sewer and committee members Edmond Roberts and Andrew Penn attended the meeting.
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